Roll No:

Final Examination 2021-22

Management Accounting

[Time: 2 Hours] [Maximum Marks : 60]

Note: Attempt all Questions. Attempt any TWO PARTS from each question.
All questions carry equal marks
Q 1(A) A company manufacturing two products furnishes the following data for a year:
Product Annual Output Total Machine Hrs No. of Purchase No. of Setups
(Units) orders
A 5000 20,000 160 20
B 60,000 1,20,000 384 44
Annual overheads are as under :
Volume related activity costs 5,50,000
Set up related costs 8,20,000
Purchase related costs 6,18,000
You are required to calculate the cost per unit of each product A and B based on:
(i) Traditional method (ii) Activity based costing method

(B) Standard material and standard price for manufacturing one unit of a product is given below:

(C) The sales turnover and profit of M/s Gupta Ltd during the two year 2014 and 2015 were as follows:
Year Sales Profit
2014 4,50,000 60,000
2015 5,10,000 75,000
You are required to calculate:
(i) Profit-Volume Ratio
(ii) Sales at which company will neither lose nor gain anything
(iii) Sales required to earn a profit of Rs 1,20,000
(iv) The profit made when sales are Rs 7,50,000.

Q 2 (A) Differentiate between controllable and uncontrollable costs with the help of suitable examples.
(B) What is standard costing? Bring out clearly the relationship between standard costing and budgetary
control.
(C) How is the Traditional method of charging overheads different from Activity based costing method?
Also explain the steps involved in Activity based costing method.

Q 3 (A) Top class company supplies you the following standard cost per unit for one of its products:
Direct Material Rs 1.60
Direct Labour Rs 1.50
Variable factory overhead Rs 1.20
Fixed factory overhead Rs 3.00
Production at normal capacity is 2,00,000. Variable selling and administration overhead per unit is Re 0.50
and fixed selling and administration overhead are Rs 75,000 per year. Production and sales data for the year
2010 and 2011 are as follows:
Units produced in the year 2010 2,00,000
Units sold in the year 2010 1,60,000
Inventory 31st Dec 2010 68,000
Units produced in the year 2011 1,50,000
Units sold in the year 2011 1,80,000
Selling price in each year was Rs 10.50. Prepare Income statement for the 2 years under Absorption Costing.

(B) Infra India Ltd has three divisions. It is considering to make additional investment in one of these
divisions. The relevant information is given below:
Division X Division Y Division Z
Additional Information 5,00,000 5,00,000 5,00,000
Net profit on additional investment 70,000 65,000 85,000
Current ROI 15% 16 % 14%
The cost of capital is 12%. In which division should the investment be made? (According to ROI and RI
method ).
(C) The following costs and sales of a manufacturing company for the first half and second half 0f 2018-19
are given:
First half Second half
Sales 24,00,000 30,00,000
Total costs 21,80,000 26,00,000
You are required to determine:
(i) Contribution/Sales ratio
(ii) Annual fixed costs
(iii) Break even point
(iv) Margin of Safety

Q 4 (A) Explain the technique of marginal costing and state its importance in decision making.
(B) Distinguish between budget and forecast. Write explanatory note on functions of budgeting.
(C) What is zero base budgeting? What are the advantages of zero base over traditional approach?
Signature of moderation committee